A competitive firm facing a perfectly elastic demand curve can:

A competitive firm facing a perfectly elastic demand curve can:
 a. increase price without losing any sales.
 b. sell all of its output at any price it chooses.
  c. sell all of its output at the market price.
 d. sell more output only by reducing its price.

QUESTION 2

If a hydel power plant expects the interest rate to rise in near future, it might resort to installation of more turbines and dynamos in its firm in the present period.
 a. True
  b. False
  Indicate whether the statement is true or false

QUESTION 3

Fiona can iron 5 shirts or cook 2 meals in an hour. Alicia can iron 6 shirts or cook 1 meal in an hour. Which of the following statements is true?
 a. Fiona's marginal cost of ironing a shirt is greater than Alicia's.
  b. Alicia's marginal cost of ironing a shirt is greater than Fiona's.
  c. Alicia's marginal cost of cooking a meal is twice that of Fiona's.
  d. Fiona's marginal cost of cooking a meal is twice that of Alicia's.

QUESTION 4

Which of the following may lead to diseconomies of scale?
 a. Specialization on the basis of comparative advantage
  b. Lack of coordination among the division heads
  c. Using larger and more efficient machineries
  d. Division of labor on the basis of capability
  e. Specialization of marketing, pricing, and research

QUESTION 5

A firm facing a horizontal demand curve:
 a. cannot affect the price it receives for its output.
 b. is unlikely to price its goods below market price.
 c. faces a perfectly elastic demand curve for its product.
  d. is characterized by all of the above.